Hard times for French cleaning industry

25th of November 2011

ECJ reporter in France, Christian Bouzols, looks at how the economic crisis is affecting the sector.

The 19,000 cleaning company chiefs in France are struggling not to shed too many jobs. During the past seven years, they have created 100,000 new jobs, none of them can't be outsourced abroad and nearly 80 per cent of them under open-ended contracts. This growth has been maintained since 1995.

But now the economic situation and its impact on cleaning company turnovers has begun to affect the industry's recruitment prospects. During each of the 2006/7 and 2007/8 fiscal years, cleaning companies saw their turnovers increase by 10 per cent, but this figure dropped to 0.9 per cent in 2009/10.

The drop in the number of cleaning companies was even more worrying as two per cent of them closed down in 2009 while during the previous two years, there had been a 16 per cent increase in the number of cleaning businesses. The workforce still remains high since the sector is one of manual labour, but even on that score, the past year saw a fall of 1.1 per cent, compared with the regular annual rises of over 3 per cent recorded since 2005.

To ensure its growth during those difficult times, the cleaning sector has resorted to various measures such as more training, partnerships, improvements in working conditions, better pay, new emphasis on sustainable development, and various recruitment and career development initiatives.

The cleaning sector has also depended on several job protection measures by the government. Some of these are now under threat and this could have a bad impact on jobs, and thus on the more vulnerable people in the industry.

One such measure was the relief on employer social security contributions. This relief was instituted during the 90s to protect jobs and it helped the cleaning sector to keep several thousand jobs going. It is estimated that about 15 per cent of the total payroll could be compromised were this measure to disappear. At this time, the minimum wage in the cleaning sector is 2.5 per cent higher than the official minimum wage.

The cleaning industry operates on small profit margins and the crisis has intensified competition on prices. The worst hit are those companies that haven't diversified. Those that have managed to trim down or develop activities of higher added value seem to be better equipped to face the crisis.

But this penalises many workers whose wages have been frozen and whose bonuses have been cancelled, or who have had their overtime reduced. All this involves knock-on effects on the standards of living of people who are already vulnerable. One consequence of this is an increase in the black economy, where cleaners often work informally to make ends meet.

Financial constraints have made life more difficult for companies generally, and particularly for those clients who have sought to streamline their expenditure. This has led to a restructuring of cleaning services which has often resulted in a reduction.

Another consideration is the national failure rate of companies. Over 7.5 per cent of all existing companies in France folded during the years from 2007 to 2009 and the rate of new business creation has been falling, with the exception of sole traders. The fall in business numbers translates into a fall in numbers of potential customers for cleaning contractors.